Mr. Speaker, I am very pleased to address the House and begin debate at second reading of Bill C-52.
As we all know, this bill deals with the growing problem of piracy of direct-to-home satellite broadcast signals. Obviously, its purpose is to strengthen the measures employed to fight unauthorized decoding of direct-to-home satellite signals in Canada.
This kind of piracy is a theft of intellectual property and a growing problem in Canada. Illegal dealers make huge profits from the sale of unauthorized products capable of decoding encrypted signals sent by satellite television broadcasters.
These pirated systems function through the use of illegally altered smart cards, that enable unauthorized users to outsmart the conventional signal decoding technology used in satellite television receivers.
The viewers buy these pirated decoders from illegal dealers and then have access at no cost to satellite television.
Such actions are illegal and unethical, and pose numerous risks to the consumer.
They are illegal because they are in direct contravention of section 9 of the Radiocommunication Act, which was passed by Parliament in order to guarantee that Canadian companies can operate in a fair and equitable market without hesitating to take risks with respect to technological and programming innovations.
The broadcasting sector generates several billions of dollars in revenue and employs thousands of Canadians. I have some figures I would like to share with the House. Licensed Canadian broadcasters are described by the generic term of broadcasting distribution undertaking. These undertakings provide Canadians with broadcasting services in various formats, depending on the technology used.
Last year, private broadcasters earned $3.6 billion in revenue, employed more than 12,000 people and invested $1 billion in Canadian programming.
Cable distribution undertakings earned $1.7 billion, employed more than 9,600 people and provided services to 7 million subscribers.
The newcomer to this industry is direct-to-home or direct broadcasting by satellite, a service that has been provided in the United States for over a decade. It was not introduced in Canada until 1997 when Bell ExpressVu and Star Choice began providing their services after receiving CRTC approval.
These companies serve 2.1 million subscribers combined. Although they are not turning a profit yet, they have generated a combined revenue of $940 million. Last year, they invested $46 million in the production of Canadian programs.
To sum up, satellite broadcasters have quickly become fierce competitors for cable service providers. They cornered 20% of the entire Canadian market in 2002, while providing Canadians with a better choice of Canadian programming.
The vitality of the DBS industry is based on innovation. This industry uses new satellite technology such as Nimiq, the powerful DBS satellite developed by Telesat Canada. With this technology, satellite broadcasters are able to provide digital services to previously underserved urban and rural areas.
This is undeniably a good thing for Canada, and businesses in this industry must be able to rely on a fair and equitable market to get a good return on their investment in this type of technology.
However, the profitability of satellite broadcasters and of all broadcasting distributors, for that matter, is threatened when consumers try to have access to programming without paying for it.
When they illegally buy material that allow them to get around the technology and to get the signals free, they undermine the capacity of these businesses to get a good return on their investment.
We want to encourage innovation. We want to promote vitality and creativity in the broadcasting industry in Canada. We must implement market control rules that protect intellectual property. We must make legislation that encourages those who take risks to continue down the road to innovation. We must stop the proliferation of illegal equipment dealers.
The industry estimates that the number of unauthorized users of direct satellite broadcasting services ranges from 500,000 and 700,000 in Canada. Studies reveal that these activities lead to annual losses of $400 million on subscription revenues for this industry in Canada.
The provisions of the Radiocommunication Act clearly define the activities of illegal equipment dealers as being illegal. In fact, a decision by the Supreme Court in April 2002 says that unauthorized decoding of any encrypted subscription programming signal, no matter where it comes from, is considered illegal. But it would appear that the current provisions of the Radiocommunication Act are not enough of a deterrent.
The use of decoders is not only illegal, it is also ethically wrong. It is theft. This trade is in the hands of unscrupulous business people who, by making their services known on the black market, have shamelessly incited people to break the law.
Using illegal decoders to watch television is also a financial risk for consumers, who believe they are getting something for nothing or in exchange for a onetime payment to unscrupulous business people. In the end, however, consumers could be left empty handed.
To protect their interests and discourage satellite signal theft, direct-to-home broadcasters frequently scramble their broadcast signals. Consumers purchasing illegal decoders are at the mercy of unscrupulous corporations, which must continually provide their clients with the most recent encryption keys, allowing the uninterrupted decoding of broadcast signals.
Consequently, Canadians using illegal decoding equipment could face substantial financial losses. Their service may be terminated without notice or possible recourse, because consumer protection laws do not apply to purchases of illegal goods.
Corporations selling illegal decoding equipment are exploiting consumers who may be unaware that the technology they are buying could quickly become useless. The bill before the House today includes measures to protect consumers. However, our target is the unauthorized resellers, who earn millions of dollars from their illegal activities. This kind of crime is on the rise, and it is our intention to put a stop to such activities.
In closing, I want to add that this bill also includes measures on public safety. The use of pirated receiver cards has been found to create signal interference with licensed radiocommunication systems of emergency and police services. We must put an end to the illegal exploitation of radiocommunication signals, as this endangers the legitimate use of wireless first responder services.
Those are the problems we face. How will the bill help us to resolve these problems? It will do so by presenting three measures aimed at discouraging the unauthorized decoding of satellite signals.
First, the bill improves import controls in order to prevent unauthorized radiocommunication material from entering Canada, including illegal satellite broadcasting material. The Canada Customs and Revenue Agency has indicated that the current Radiocommunication Act is difficult to enforce.
Right now, import controls for illegal satellite broadcasting material are ineffective. We want to improve the ability of the Canada Customs and Revenue Agency to seize illegal satellite broadcasting material as soon as it gets to the border.
Second, the bill increases the penalties set out in the Radiocommunication Act so that they will be more of a deterrent for anyone tempted to steal satellite broadcasting signals or to commit certain other crimes.
Satellite piracy is an extremely lucrative business. Dealers advertise their illegal products and services in our newspapers and on the Internet.
There are penalties under sections 9 and 10 of the existing act, but they are not harsh enough to have a deterrent effect on dealers. In fact, paying the fines that are set out in the act can be considered as the price to pay to engage in these lucrative illegal activities.
Therefore, this bill proposes penalties that will send a strong message to industry stakeholders and to the courts to convince them that Parliament sees satellite piracy as a serious offence.
Third, this bill reinforces the existing right to take civil action. The Canadian broadcasting industry tried to curb the growth of pirated satellite services. However, the civil recourses that are available are both expensive and ineffective. In many cases, it is difficult and costly to prove a causal link between the illegal act and the extent of the losses incurred by the industry. With this bill, it will be possible to elect to receive statutory damages instead of having to prove the extent of the damages caused.
Satellite signal piracy causes financial losses to an important cultural industry in Canada, an industry that supports Canadian programming and that employs thousands of Canadians. The government is committed to improving the stability, integrity and general conditions of broadcasting in Canada. We wish to improve the stability of the industry in order to encourage investment and competition.
Current penalties are not tough enough to discourage satellite signal piracy. We shall make the penalties stronger, make it possible to seek statutory damages, and increase our capacity to stop illegal equipment imports.
The purpose behind these measures is not to limit the choices that are available. What we want is to prevent the slow death of broadcasting in Canada. The end result will be better programming and wider choices for Canadians, and fewer opportunities for those who are tempted to make money through illegal activities.
I invite all members of the House of Commons to join me in supporting this bill.